First home buyers dive into market

More Tauranga homes are changing hands but average sale prices are down as lower-value homes attract first-time buyers.

Sales in the city were up last month with 124 properties sold - compared with 115 in September and 91 in October 2011.

However, Tauranga's median sale price was $333,000 last month - down from $358,250 in September and $352,000 for the same time last year.

Ross Stanway, chief executive of Realty Services which operates Bayleys and Eves, said the figures reflected the fact a lot of sales were occurring within the median price range.

This was because of the increasing activity of investors and first home buyers, he said.

October had been a busy month in terms of the volume of sales and he expected this to continue in the lead up to Christmas.

Mr Stanway said the recent council revaluations reflected the stability of the Tauranga market which, unlike Auckland, had not experienced large fluctuations in prices. A stable market gave both buyers and sellers confidence, he said.

LJ Hooker Bay of Plenty franchise owner Neville Falconer said average house prices had been dropping thanks to more lower-priced properties being snapped up by investors and first home buyers.

"It's mainly new people in the market.

"There's some investor activity returning, but investors are still only really looking for discounted properties where they can see a twist in it.

"The good thing about all of that is, that's starting to release a little bit of activity for the sellers of those properties who are re-purchasing back into the market - perhaps a little bit higher up."

Real Estate Institute of New Zealand chief executive Helen O'Sullivan said the Bay of Plenty region had seen a solid increase in sales reflecting an increase in listings and more choice for buyers.

"However, across the region prices remain steady indicating that the market is fairly well balanced," she said.

The average QV value for a Western Bay of Plenty property is $399,914 - down 2.4 per cent year-on-year.

Nationwide, sales surged in the past month and prices hit a record median high.

The national median house price increased by $9000 in October to $380,000 - a 2.4 per cent rise - with Auckland recording a new peak of $530,000.

More than 6600 properties changed hands last month.

Ms O'Sullivan said the springtime surge in new listings was struggling to keep pace with buyer demand.

Sales volumes rose across the country in October but prices did not automatically follow.

"The market is very much in two parts - the metropolitan regions of Auckland, Wellington and Christchurch, where prices are rising; and the rest of the country, where price trends are mixed," Ms O'Sullivan said.

The total value of residential sales, including sections, was $3.15 billion in October, compared with $2.62 billion the previous month, and $2.15 billion in October 2011.